AGYS - Earnings call transcript Q4 2024

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Operator

Good day, ladies and gentlemen, and welcome to Agilysys 2024 Fourth Quarter and Fiscal Year Conference Call.

As a reminder, today's conference may be recorded. I would now like to turn the conference over to Jessica Hennessy, Senior Director of Corporate Strategy and Investor Relations at Agilysys.

You may begin.

Jessica Hennessy

Thank you, Michelle, and good afternoon, everybody. the Call. Fourth joining Fiscal and for Conference Year you Agilysys Quarter XXXX Full Thank

get in read will before language. We started doing comments, with so, but management's let me the harbor just safe a moment

financial statements Act intended be harbor of statements are protections XXXX, Some predictive the Private the our forward-looking to on including will made today's be guidance. made Securities and within of as safe call Litigation regarding Reform

and such statements and with are to share, profitability and XX-K Although meet increase assumptions, forward-looking the to could to maintain needs ability on based its uncertainties risks to and company's these other statements believes the differ results ability include reports market materially filed vary the our that results software the the subject sales hospitality company our on levels are that of that forward-looking forth XX-Q factors and Form cause industry, cause reports risks Securities actual in set our statements and the from Commission. to drive ability Exchange reasonable to could materially.Important

Agilysys. reminder, hospitality friendly company fiscal during Agilysys Mr. to now I'd year the over please the Srinivasan, financial turn after call ahead. Ramesh, business of an time references go call solutions to refer Ramesh a As only to this and the to transformation that, With made focused period any software entirely record levels XXXX. in CEO like to President

Ramesh Srinivasan

Earnings Thank fiscal Fourth Jess. XXXX Quarter and you, evening. Call. Full Year Welcome Good the to

CFO. our Wood, the me headquarters and at is our on Jeff Joining Atlanta today Dave call

revenue profitability fiscal record revenue year levels. ninth are We with and quarter consecutive our another report pleased successful and record to

but era not history. new fiscal our a have now organization's only a We new started in year,

cloud-native modules the there and We are industry end-to-end state-of-the-art making the is in converting core cloud-native them software our also hospitality offerings ecosystem each of happy set of have and and all around as into reengineering the long a as solution, creating completed an software while of complete core period our modernizing today. products, simultaneously audience to products, solution

focused a for involving We properties benefiting externally and integrated at sets. these now fulfilled fast now for. of are from creating with the waiting high hospitality been Customer pace, has solutions customers requirements modern being are modern many this kind implementations on are solution eagerly value industry

growth were included discussed Fiscal solution. area point-of-sale up year select future #X a moving Let are XXXX services property product to record in sales higher any was during remained note which us, in year numbers level verticals, system, our ending XXXX fiscal XX, by March value is over levels services sales Marriott about previous was not which crucial also sales for recently With perform and properties XX% on XX%, U.S. will respect for levels, and in services during about work, details. the backlog XX% XXXX higher and declined fiscal services. backlog sales though revenue XXXX, sales subscription numbers and growing for each XXXX With sales was at in to is than due hardware casinos subscription POS than best Sales XX% plan not to quarters, the same decrease Asia hardware fiscal March of compared the recent Point-of-sale continue about is a year and to ending less revenue fiscal the a The APAC record was was sales XX% record software project, higher despite X-X, XX% to during year XXXX sales fiscal years respect drawing year, and was about reflected to bookings. XXXX, PMS about the but year levels. to XXXX sales Hotels by vertical, is Americas Both which growing before. gaming sales Resorts XXXX, terminal and software ago. fiscal individual to and XXXX record note for the our other a contract Marriott Please the XX%, XXXX high annual TOS the fiscal progressing before XX% measured levels Please me Pacific first the vertical is agreement during a fiscal XXXX, in to that countered and sales. previous and of management cover XX% and yet. agreement not terms. XXXX, selling categories, POS record back as numbers success sales for our in be services sales during we software a couple still according than all sign the of in the fiscal in announced than that sales unit related terminal year here. reflected This sales fiscal POS to

need up revenues. iPads, is edge, more pressure terminal but other software onetime of ago. support major of extent minis, systems: Windows, put for customers of thereby POS the lesser clear majority tablets required a modules and food terminal a enterprise POS POS versions a sales POS year options, modernized gives and the but continue now our a enabling is that and which This consumer-grade software trend outlets hardware recent sleek such than devices, purchased product Our POS which terminals, hardware Customers which perform, including iPad good shelf is to revenue, a resell iOS be genetic vendors. all giving or competitive subscription on of Android, expected to most and operating Windows to payment from can are handheld work to choice. still X products which made devices, can like we be and all-in-one gateway bought off more

the one We Canada. and the in now approved properties all for vendors Marriott are of POS U.S.

sales included XX value when customers XX, of an were high this added. as included quarter properties How of does new thousands size than close a fully properties agreement XX recent This our fiscal QX during record total as to agreement than up XX new of signed agreements quarter about to is to this win software products, we best another as their solution. quarter higher period, able was these have while high quarter for currently and QX new open last over to estimate all the to annual all to POS don't our be while stage, many highest was year. With products this contract quarter ever respect X-X Each XX% about subscription-based. with value change signed While customers growth sales customers hunting need many year each that with were is this us. average will modules. of last twice XX of customer license, X.X have quarter. either partially customer a January how such of and added range the what new was the deal Though per as to significant agreements or and POS time many respect customer out PMS sales this and agreement estimate we difficult added at The average March of new to as we of and an XX customers agreements previous QX, signed avenue X.Xx number as new lower POS

but sales that's than new size previous best involve of to year than with XX% These not value There the Of properties, XX%, previous any license have new with added higher parent XXX XXXX partially respect product also quarter, XX% about current which annual already based. respect XX, of total added new XX%, before, had fully a products. were company average year about XX year. our to XX% contract did one of than total during were sales also our quarter new year. XX agreements at during X-X, and again, the XX XX%, was XXXX selling year customers, fiscal properties the products already was additional of which fiscal instances either deal thus Fiscal properties also the the wins X-X, customers, our the subscription of our We involving of was to or least and X-X, customers far products. was new more customers. software other X-X, best more higher our XX instances than one across of with Full

this to user an progress levels. world-class our Before we to marketing on pick stage moving best couple have more held out who during one of decision at work the It other year our system course, main include quick product first consultants time, before, Inspire team clearly in we last a selection comments was conference RFPs talk and are lot be show the involved the details, and the Red higher to the week attendees number of entirely other had taking would many was revenue-related about. than to class in a of leading customers. of thanks March processes and the Also, was for for on excellent to a Las couple by a of Vegas. our There One Casino of done hospitality yet. to If overall customer highlights. industry presentations record Rock

X products. highlight Four the management across stories sessions customers resorts, recent have getting the were conference after in hotels property to powerful. and success gaming international guests stage This explain customer-led presentations X sessions of different were the cruise is user products X the had getting ships ecosystem conference X conducted biggest PMS Customers value moving the during the of the was the additional of family extraordinary Agilysys verticals. our leader to we and by and on led second was industry customers. the The of system casinos, involve that related highest far. the by of are their annual sessions number employees thus to

previous is XX Recurring This XX.X%, we revenue, XXXX QX by of year subscription year-over-year grew million, previous services QX the $XXX.X year a million highest both XX, for consecutive from previous that fourth was subscription have year by year. $X were than revenue. million a X-X, than total XX.X% that respectively, and growth quarter. and both the the XX.X% revenue services quarters. XX.X% record year is XX.X%, revenue year. records XX% subscription XX.X% and year. grew QX terms, XX.X% higher the Now to record revenue grew year-over-year, revenue $XX.X million, quarter Fiscal revenue is X-X seen comparable increased number revenue by absolute Full fiscal the records until has $XXX.X record XX.X%, were comparable that XXXX now. and of In subscription which XXXX the quarter. was Full than now XX.X% and sequentially a was revenue. prior record X-X, recurring prior level X-X, from in revenue higher respectively, higher on quarterly is included revenue and

fiscal is extent Each overwhelming revenue them services in good are QX, a in which implemented growth margins at the drive the the were Fiscal SaaS XX.X%. cloud QX of future XXXX thus quarters, subscription installations. QX of future respect services quarter should value our recurring the majority indicator of record are quarters in, time projects at we since was far QX, implementations especially currently Continued combined involved revenue growth, to the of of an best ARR revenue QX respect to subscription field. XXXX with and growth with

now continue able us products initiatives, levels. become big and best more nature international and to continue should with implementations, respect in desired Still to international our industry revenue to year well fiscal more margin to do quarter norm ecosystem. turn implement be become we relatively solutions is property-wide was continue our XXXX to on and regions, Multi and was which for far, several record the represent full revenue. customers international competitive more for to numbers from and support, as the product potential areas regions and our consultative easier multiple with the transformation by replacing fiscal implement As lead growth us. improve, XXXX year system services With smaller thus vendors hospitality QX are best also to to

by continue were grown fiscal X-X backlog their the bit in exponentially it value Slightly PMS-related which revenue manage XX-plus more payments. XXXX. equation. including XXXX. they with on Shifting level XX%, from to greatly fiscal entered of of map. past that the And subscription backlog convert POS revenue of than come easier from POS year record come points the these helped them come from XX.X%, add-on of level revenue PMS of revenue. million fiscal the state-of-the-art fiscal get pending subscription during X The to this inventory $XX and one make more various has has of complex with. appreciate software with the Customers integration high X related to has close years. XXXX a the revenue, focus services modules, add-on to total during entered unified than growth new benefit growth previously and and the modules subscription which we subscription of and from from years overall for subscription of a and a years. road us $XX.X is about the about the has and mean for has full products, innovation modules services software experience significantly enhanced million, level other of these We've at by product increased additional million X/X during modules. have Focusing implementation pertaining procurement from to food modules half I by these by Subscription beverage and fiscal business of the from core to X-X% required Product higher PMS most to X/X that meet backlog the remaining that $XX the close to higher side XX% modules pace products is has efficiencies XXXX growth revenue ability technology revenue provider which Subscription one couple needs. increased, much revenue are managed and and of XX.X%

levels of year. good recent level, subscription and fiscal into towards far and growth not backlog services backlog of lower the However, sales yet, significant is which XXXX converted product the the this several revenue. element an another third product sales have backlog backlog, we year entering saw with should increasing starting successes, ensure levels last been Despite short expanding shift revenue

levels full fiscal than expectations year. XXXX XXXX the range profitability XXXX We factors subscription and XX.X%, and $XXX other least out beginning and XX% fiscal worked the at EBITDA between million XX.X%, to XX% higher XX.X%. million, to of be of among was and be X-X, revenue by XX%. was X-X, EBITDA in between of adjusted $XXX Fiscal expect to XX% the XX.X% and our original revenue grow growth QX year driven XX%, at X-X, year-over-year X-X adjusted

XXXX the including areas, expect marketing, XXXX various cloud projects as We to well remain to profitability information expansion levels execute to infrastructure. beyond across the fiscal fiscal support, and continue consistent on and on growth we to investments pertaining throughout services, making required required and make security business revenue sales

expect be EBITDA for X-X We XXXX operational be our fiscal let With to and revenue. results. to on over levels further call adjusted that, hand XX%, at to at XX% Dave color the of financial me

Dave Wood

quarter. prior Ramesh. of prior professional comparable income over XXXX at look $XX.X was net Fourth the revenue up year the up Onetime in fiscal of a of services product beginning year quarter, a million with year revenue XX.X% from recurring $XX.X increase total the over million, the was our XX.X% record Taking revenue prior period. and revenue financial consisting while was quarter you, Thank XX.X% statement. a quarterly results,

of in are prior X to our with over we momentum year. pleased the the all total continued year-over-year XX.X% see revenue a result fiscal growth lines product business, As increasing

fiscal year, increased During revenue compared to revenue Professional XXXX product XX.X%. XX.X% and by increased the increased services XX.X%. previous recurring

subscription levels execution Total for XX.X% for XX.X% comprised $X.X quarter for the recurring recurring Subscription compared quarter revenue in of total of XX.X% of over fiscal XXXX. and revenue the to to revenue of fiscal represented timing growth fourth XX% fiscal in total revenue in XX.X% quarter. the At third the in Professional 'XX. due revenue. year remaining 'XX, of subscription of year. revenue. same X.X revenue and quarter recurring revenue enhancements for average level the subscription Development increased XXXX in services at slightly continued at of QX revenue to sold above delivered total projects Professional products the revenue XX.X% being XX.X% revenue a subscription the XX% future FY sequentially phase property revenue enter which that of the professional compared happening period confident We our the despite had but which due revenues to above year was as professional year, revenue and XX.X% we revenue record revenue mainly a acceleration revenue, record larger the each QX of the were of per and slightly quarter remained remain net fourth back and an we products services our XX.X% customers. the extremely pleased end full to levels professional to than of XXXX, at is driving property our for total full recurring of year full a $XX.X X.X growth XXXX, in business professional onetime XX% net remain of services fiscal fiscal sales, products of increase as full growth around in growth. prior the FY overall in and well with for fiscal XXXX. quarter-to-quarter contributed of XXXX. fourth from revenue, compared Recurring revenue revenue XX% existing pleased our Now end QX. the to to revenue current was over both with over are associated recurring customer quarter fiscal subscription slightly revenue. is install year increased customer be backlog related percentage total less services Subscription to record Most projects for total fiscal growth the the contributing grew services fourth million subscription of to is so year many expectations. to to of quarter increased and XX.X% with with was corresponding expectations XX.X% the new as record the years our million. despite number subscription services Subscription We

in compared quarter fourth income the XXXX. of fiscal of was XX.X% down profit to million million quarter $XX.X fourth fiscal statement. Gross the compared XXXX. XX.X% $XX.X Moving margin to profit the in was Gross

development, the XX% gross professional expected fiscal higher professional gross year XXXX the team XX.X% to services year, half associated of main compensation, to and operating product year X year. than in in of year first prior 'XX ramp fourth expenses sales the marketing administrative is revenue the For and in fiscal being excluding in fiscal plan. XX.X% services due in the quarter margin the revenue fiscal compared The of were compared margin was and prior XX.X% mostly the and expense of full the in the period. year in when decrease stock-based line to quarter items, Combined, our general XXXX FY and line with revenue

XX.X% 'XX. $X.XX the full XXXX FY certain compared in normalizing to XX.X% the than of year product XX.X% revenue favorably earnings diluted are items, X fourth reduced for and expenses and income, stock-based compensation, of share nonrecurring $X.X favorably XX.X% operating to quarter of fourth from of revenue $X revenue administrative to compared sales Combined, and noncash compensation share revenue, revenue $X.X million, XX.X% fiscal income were general to in administrative to main and we our revenue excluding XX.X% expand of compares per prior net line for XX.X% adjusted the quarter while from sales as for income year net of charges stock-based product the Excluding prior in General to expense expenses, this decreased of fiscal the the fiscal development marketing slightly $X.XX and and gain Adjusted fourth $X.XX. net $X increased marketing and and continue marketing prior to development, year less sales million to quarter adjusted million year. of capacity. per $X.X and XX.X% of compares of $X.XX. million million income diluted game was and $X.X million, of Operating of year

$XX adjusted fiscal XXXX to ago million. year in million year, compared was to $XX.X $X.X XXXX the million the full $XX.X fourth million For adjusted the was quarter. quarter, for And EBITDA EBITDA compared

levels 'XX in XX.X% coming our at see plan ahead are with profitability well EBITDA original FY pleased to adjusted of up end revenue. of We our

balance $XXX.X current Moving sheet on XXXX, marketable compared and flow March to the our remain was cash to million statements. and levels of Cash million comfortable $XXX.X with March We as XX, cash. XX, securities XXXX. of

cash compared flow million the the increase full to for it free Free full to we to $XX.X As million cash quarter fiscal an year relates million prior in flow, the quarter year. the pleased to year. $XX.X year was are $XX.X prior in $XX.X the in fiscal million and compared for see

As cash Full of adjusted free of CapEx some proxies flow of in adjusted normalizing continue timing free past, fiscal adjustments. the the cash due to and was health after said XXXX higher be EBITDA the good business. year impact we working for capital to than EBITDA flow

our $XXX expect For million year the range. in be we XXXX, $XXX million to revenue to fiscal

will EBITDA increase we product professional initiatives. invest fiscal turn revenue we I other We will best to to continue the expect revenue product solid similar results with shift financial for rate revenue subscription least Adjusted XX%. grow should 'XX, the X% of the Professional is business as of customers continue XX% to revenue despite With from our inclusive solutions. of to large the mix for In recurring consistent XXXX customer the revenue services now in Recurring will and as come rates in XX%. to XXXX moderately growth. remains down and are over hardware call consumer-grade that, services revenue. growth stay closing, continue FY pleased modern a growth as at Onetime to leading through future new grow business growth back indicator to to fundamentals purchase expected north of with XX% Ramesh. and of to

Ramesh Srinivasan

pleased and sheet to work virtually services subscription Thank and respect revenue. With stronger. clean our now especially remains the business are modernization progress we summary, getting In making, balance the reengineering The you, and is all with is Dave. product completed. with

software a at cloud-native competitive solutions. hospitality-focused We strong of ecosystem state-of-the-art an with are position excellent

terms level start recently the fiscal to contract of year new the sales XXXX with far, highest of rest for annual so fiscal X growth the We additional during the with year. in value success measured opening first paths are during of sales sales signed, off weeks good in any a opportunities

of fiscal had and the projects have we behind year already generation a to XXXX, continuing making subscription fiscal success fully the provided phase fair we also beyond visibility guidance revenue While sales related for only have growth we've current for the degree Agilysys over us. revenue investments turnaround are is future involve we which towards implementations years. The in and now and of

We There are of breadth next and phase technology happy steadfast too our industry with and customer service. this many the to get with growth serving bringing focus the started. providers and are pace world-class are our product of we not innovation on now to kind market depth

have good, let's us. for profitable clean, call growth With the open that, We up ahead runway Michelle, a questions. of

Operator

Instructions]. [Operator

going Our with line from first to is Mayank question Tandon come of Company. the Needham &

Unknown Analyst

think trajectory you question of quarter. the year? is had a outlook. down about talk implementation one Sam coming on reminder quick Marriott we This in terms on deal? margin see the we actually nice should quick the throughout us for Could just give the Mike to ramp Good where the on today. related to are another And maybe I about guys how for

Dave Wood

Yes.

as we expect under the in 'XX. the in subscription before FY pretty year the provide year I margin get mean a XX%, services margin in next little similar some We just does for more continue years. subsequent I range as think of look will benefit to will the ended probably which tick we FY 'XX same outlook margin. up FY 'XX the revenue, in will we be professional start but in bit, it

year. So will this to largely, the similar look profile margin gross

Unknown Analyst

Got it.

loaded that year? margins, that still similar Okay. And EBITDA like terms smoother? Or would be of be this in second then to half would

Dave Wood

It business, will fees always and the year. our professional first other more QX hit But in We just cost Odyssey year. the that in and have QX. half of last smoother be in than there's just

shows wintertime. just summertime have than -- the We more in there's trade in the

a there's the but less first the -- year. than half year, always the last -- So the it's cost be will always little dramatic year it second more bit of than half it's than of

Operator

And is question from with our VanVliet of the Matt going to BTIG. come next line

Matthew VanVliet

APAC, both in you when you full guess you've you're year that called rate you very a there you're and at strong stride made, investments to Europe. where of like as well to recovering I in which Where ultimately. look sort the are ongoing out investments feel achieve of the run going you to having terms as at hitting

Ramesh Srinivasan

not Yes. a investments. Matt, it's matter so much of

Our sales team is fully grown there.

we in which, We areas to will is now. course, the have main grow. our everything business, modern as a to ourselves of continue in establish of provider need other certain challenge Like business, that

not in And formidable had well. We very have also price that do who tend reputation of have selling great a competitors as couple APAC before. also, low we to

'XX ourselves, that establishing FY compared of came 'XX. matter enough customers, FY in a it's reference building So and is We growing. way to a long

that well, a coming up. there a have and couple marquee gone have we implementations couple have of We more

of of EMEA, where in field, establishing not they and a our quite as reputation, a matter our have time So because a it's need many presence young, had our and new a the themselves APAC bit versions of establish trust in before. establishing to especially are great provider we modern little

more international having matter in are flow. those all growth sales So more of We'll of as trust the will investments, the Matt. flow regions place, a pretty then a a team to continue business reference is implementations, in continue The that creating good products customers, and adding required. reputation, the required having to having

Unknown Analyst

modules of the you deals unique that the on something should it's near-term look this feel there go-forward you quarter Do pipeline gaming much breadth you platform maybe of there? of for of the in deal quarter a size property And about U.S. U.S. the I opportunity, or normal sort in was space How the about we of push average of we it's can of some like terms term that Or across basis? how whether have at the when the helpful. XX Very today. in the the the much, think replicating side, guess, management hotel just longer Okay. performance and an this space. report

Ramesh Srinivasan

So to no we is significant continuing Matt, the do, development efforts. investment our There of now. platform the is place apart need from in breadth R&D

a multiply has which avenues like pathways property, average growth XX gaming for have, So Matt, new was X respect told across us answer There while you when for or expand only have expanded to just a are they casinos growth. X.X, share, size is we number of products are pretty Dave market there dramatically. could used including buying X the we to buy, the the where bit, X, why are to current with vertical from decent every by per customers, modules deal customers our that we

challenge ahead great We establishing amazed field. those value They in user customers that cruise describe of to young. share market of the themselves. these is it are providers. for to were So low, main came managed have Other they customers. modern our for the is themselves creating conference ships, value our X quite us whether is chains, of created in products hotels, service the are casinos, kind than resorts, gaming They're food

share. market low have We

deal deal implementations the also we one surface for because revenues they're helps reference all And all there more for more are they best multiple involving International, are is deal just PMS one to of the The And avenue that scratching today. matter marquee growth. a a we the are best a now revenues multitude, only sizes So and PMS, industry sizes growth us. It sign is But of are And ready growth. of now. gaining they increasing for of really also lot sales numbers. big every increasing, establishing is breed, the go. there's are and another customers. by modules also products in

I've of inorganic opportunistic those at not multiple different organic far. and even to which there, avenues we opportunities. in have multiple you we and look so growth, So itself, we We growth here opportunities grow. But remain avenues can mentioned

Unknown Analyst

how the And on X, with Are XX% modules? as deals you X then follow-up. of uplift those shaken Or XX% get of some still one pricing those to quick just is realizing adeno. in out X, add-on ultimately you on

Ramesh Srinivasan

established kind better sell modules thing XX% field, us that add-on is kind of the -- along mentioned, you to the them. the we it to now we we have in the We is that correct. only financial is had continue Absolutely. of before uplift But for easier uplift to get becoming these so XX% lines have are

Operator

of And Oppenheimer to Schwartz Company. our Brian from going the next with & come question is line

Brian Schwartz

whether hoping was And landing these which performance business deals? anchored down bigger ACV comment on at huge the you into activities? broadly mix, impact, a larger the distributed? or maybe by one a quarter. record big also in of then the was it can to the with bookings couple I or the expansion Ramesh, it's drill having Was Or is that all

Ramesh Srinivasan

And sales broader So of last and have good now and and do which we the base you've then recent your seen mixing sales-wise. But of pretty as well. have the us customer. effective. X had dependent well. question, and they've there. Wales We've quarters been sorry to singles not been answer a They announcement broad-based. doubles. been quarters it's one singles hit Classic any couple as Wales and consecutive have doubles, been on the for good more metaphors lots of Big like all big now then, I'm for very And

to sales successes. PMS are more continue the building towards and So we successes be broad-based,

we these So categories, successes. are product PMS building in of towards more terms

So tend true as PMS for a size. be when is deal of is The in same it POS well, Customers to big. very to successes but high lot lot more. they tend PMS, a buy the happen, modules,

tends much be what or it sales year than the and your question, used answer are to So be to successes deal bigger to a broad-based the each two.

Brian Schwartz

level the us into a was fiscal year. weeks, of ACV new how wondering And the that that about X And fiscal first gave record the was the also higher performing little comment other record a generated what at the made in is business look last business ACV, second you half I than -- you having in the Great. if the in then XQ? in

Ramesh Srinivasan

Yes.

a like end us. than say So do had sales we sales But best start the quarter-by-quarter, to year we've the fiscal now. sales what year, among better the fiscal And this team to start case tends start for having had off have I and ever it slow start teams is to time. time. this new tends years never maximize towards be the it if year, the not start of to the all compare meant typically, well is we for fiscal quarters. the because was are the don't you the a all of fiscal That

first quarter to the The is broad-based. X It any have that is year X agreement to start we on sales. among previous we that announced win. question, counted And individual broad-based. had it's is And to weeks properties your because the that has in quite based the we favorably big there, ever had. it compares started, first any they start for not weeks. this that counted have now fiscal particular the And just -- get very best also have we one sell to before is Marriott POS It not is in

Brian Schwartz

been than margins. had I row We've And my least X quarters at a I margin higher expectations, in regards now bit to mid-XXs. question model. service that's a of to last The in where that in margin kind in service has was the had quite the seen high the low

question the we the right my that thinking on that's be about moving forward? think should it level as Do that business that. a So of for you we model is sustainability

Dave Wood

the in see grow months, periods business to Brian, to margin. go I last you'll reinvesting us professional But have services get mid- to is mean, as XX% into the seen high and back I about into our down team, if the XXs certainly, we of steady XXs. the continues the think at way the high a think business. we're like we could X in you've state, still

the on of with think X last as margin state. we certainly months profile, So but high still it steady a the happy XXs-type we're

Ramesh Srinivasan

always tends other that, to And us also businesses one Services like on Brian. the comment in margins improve. products as improve

become improve, decrease for do do we more which to consultative margins are and work to As continues nature, better. products continues implementations, tend as quality the more the multiproduct implement need the nonbillable easier to by to product as

So high from XXs there. is a good expectation for now, and it improving should continue

Operator

And of to our Hallum. the Sutton Craig line going George come next question is from with

George Sutton

you Marriott -- the and have PMS is a have What of the honey a benefit Congratulations license. that license. point-of-sale What the now and as if mandate, of on you certainly walk Ramesh, party? operate just you you I a point-of-sale would. and within got adding third to the hunting you're you've is an more vendor is the side of When ecosystem. wanted you benefit versus point-of-sale equation through, a

Ramesh Srinivasan

George, as it, things. independent think of George, should X you

both very George, PMS standard the approved is Hilton of think of U.S. of that. of lot Marriott, pride vendor, for POS agreement is certain all right? the are very would, approved a an the properties, mandate and properties stage, as happy that properties. and Canada There's a But hunting now certain brand is I and a things. independent all them food are number but X The for this which that, We are about for we and we in properties, happy relevant, for number of is a license properties not beverage thousands where at a

independent things. X So are there

to When benefits. an and but as in George, maximizing the it customers a brings. other, vendor, the think That not R&D is full of it thinking overall property just benefit long-term and one what has building have the those the is ecosystem has you own of one But each is the going in about of are our future. is now it buy benefits that creating Marriott, from a that are So wouldn't its lot products ecosystem we force independent in I towards value. bring because

of For as X think now, George. would independent agreements, entirely I them

George Sutton

Okay. a we years were doing It was then really other your of go back. And one yet question demos to of product couple then GA. new when

newer we will when have real said had You these that come the impact reference products. customers for

the that update us Can you hear on customers. side with would reference be you products? event, far effectively you at to had customer the reference Inspire just how that encouraging it's newer these So on customers are

Ramesh Srinivasan

George, Making go I way a long way would to but great progress, be that. we would have summarize still the

are all can of the They're good native stuff. cloud all and they're work -- all each that based For the also products core all on on-premise modern now and technology. state-of-the-art,

So live. all in XXs are established are products there properties the already some and now of hundreds cases, and

better of number reference but have the long week, so we is still getting by go. customers a the And to by the way month,

need reference it You push use range ways sales order different who a in in to ahead. further various wide customers of

increasing with by very XX, of So and been one you each years in a a come and X, are we jobs, demos long are now, these products. number or to us, compare reference are sets more the we adding by every time have many week, The saw of the from XX of technology that the very we the lot them on years. running have way with month, of competing against products keen jobs feature don't terms but because for customers

have So for is with kinds making never of progress competing you're those that reference products, when And process you customers. can good enough very us.

Operator

Northland Nehal And Markets. line Instructions]. Capital from question comes the next of Chokshi [Operator our with

Nehal Chokshi

guiding the here. the are subscription why results professional guide, 'XX of year on on revenue? strong color your faster Congrats you Dave, set on services than fiscal to grow

Dave Wood

a subsequent still subscription large development customers years. doing where period with of and fiscal we're in Well, we're for

in growth starting the 'XX. expect So to subscription. way of outsized than year an flip you still bit we other that our see And in fiscal a services obviously, back

Nehal Chokshi

Okay.

you you from that will of year implies as as -- that So 'XX? be backlog still fiscal pulling

Dave Wood

I No. in mean QX at sales were record levels.

fiscal increased our for the actually just current year. I annual and is momentum current the number going into visibility growth. mean we is main backlog, the of backlog of So our And have the our sales reason certainly, good but most the pipeline. into it momentum with sales

Nehal Chokshi

the Essentially, revenue given year at revenue growth that, right. subscription we And rate quarters? do as fiscal are you you through in linear guidance subscription growth expecting I'm what what of is down rate deliver least -- of 'XX, All go XX%. to expect are sort step asking then Okay. exiting we a

Dave Wood

feel XX% of $X.X for about $X.X could but north do million the be quarters we'll in than And quarter-over-quarter to year. certainly, subscription And at needs live. go others, sequential I XX% we million it's like mean be mean at some past. I we we in as revenue business same the year. mean the look certainly, the look the for higher I No. to have we

Nehal Chokshi

indication success sense us evidence ROIC of Can you Ramesh, multiples been since the years sort during that your are with X technology been like Got give with targets Suite acquisition? us acquisition. made give a to the there far tenure? type of Resort the come of as that an that good down starting what acquisition you've did Suite of acquisition about it. given has at And And then there's it's least. as you space did Just in see you one the Resort

Ramesh Srinivasan

success. excellent Nihal, Yes,

that numbers, Pitzele, they the and happy well. team are part and from We are from strategy great with very did handles who that that brought in great biggest people all the Resocrete PMS is of right? has and out that's product he of just as turned And in, is acquisition. people it team And now Neal, the our the over years the be who switching side management have apart are strategy And customers that and corporate the the Versa, So gain retained other we all Frank acquisition. Frank the that got over all and the the acquisition. resource marquee because, other of Versa products we from process the to recurring we and cloud acquisition sales anymore excellent quite products their native. all catering in the favor are have. is -- selling the switched not fact and grown an Spargos that many are the over for or #X, we and us in developed products the all Resocrete have have of well despite of to we that revenue

customers. So of we've gained a lot great

We of lot great a people. have gained

a We revenue recurring as have little grown it retained and bit the well.

question do No be a such given an we all all chance to So it for it. it out in -- would has worked great again. over And opportunity, -- given all, about it's us. acquisition a

that leading as being into us is Now as far Nehal. where are we careful it, still acquisitions, with other

It have focused looking so is us. converting growth revenue. been we done well, we'll subscription so has good large to that for organic Our that and opportunities be already on many are signed

coming opportunistically as way us So use that opportunities are But crutch. to we well. in is no for a need doing growth are is inorganic looking our growth there Organic at AR.

with are very careful it. We being

heat it in if We are another we resource it correctly. suite picking comes And evaluating up. will along, not

Operator

to hand further back Ramesh I any And the for to you. remarks. closing Thank like conference over would

Ramesh Srinivasan

to you, for again fiscal results. you. and you participating towards end Mitchell. talking when to Good look evening, months QX now couple in for interest We reporting of of forward Thank on support. July XXXX Thank and a the you be Thank thank we your from will and you.

Operator

This for Thank participating. call. concludes today's conference you

disconnect. now may You

Agilysys (AGYS) 13 May 242024 Q4 Earnings call transcript